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Japan
This Week in AsiaEconomics

Japan to get Taiwan chip maker TSMC’s help to revolutionise its semiconductor sector amid economic, security concerns

  • Japan will spend huge amounts on making advanced chips, with Taiwan Semiconductor Manufacturing Company to build its second plant in the country
  • Analysts say post-Covid growth must take Ukraine war and Taiwan tension into account as it could lead to chip supplies from the island being cut off

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A smartphone showing the Taiwan Semiconductor Manufacturing Company logo, on top of a computer motherboard. The firm is playing an important role in Japan’s semiconductor industry. File photo: Reuters
Julian Ryall
Japan plans to inject massive amounts of cash into its semiconductor sector to rebuild its domestic industry – with a little assistance from Taiwan.
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The coming “revolution” will be different to the first time Japan dominated the microchip sector, say analysts, with Tokyo keen to build alliances with foreign governments and companies including European firms at the same time Japanese firms use their world-leading technology to manufacture niche chips, the tiny bundle of circuits that do specific tasks in electronic devices used by billions.

Taiwan Semiconductor Manufacturing Company, the world’s largest contract chip maker, on Tuesday announced plans to build a second plant in Kumamoto, in southern Japan, even before the firm’s first plant in the prefecture is completed.
The latest project is being carried out in collaboration with Japan’s Sony Group and car components manufacturer the Denso Corporation. TSMC Chairman Mark Liu was quoted by Taiwan’s Central News Agency as saying that the facility will start producing logic chips – the so-called brains of a device – with circuit line widths of 10 to 20 nanometres in late 2024.

Japan is chipping in with 476 billion yen (US$3.4 billion) for the development of the first factory, with TSMC matching Tokyo’s investment.

The same day, the Japanese government said it was looking at introducing “substantial” tax incentives and financial support for capital spending and plant construction in the semiconductor and battery storage sectors.

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